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Proposed new regulations from Kenya’s central bank could force leading telecom provider Safaricom to open its M-Pesa electronic money transfer service to other providers, possibly bringing an end to the company’s dominance of the Kenyan e-money market. The Central Bank of Kenya (CBK) last week issued a set of proposed regulations for the country’s national payment systems. Among the measures recommended in the proposal, the CBK called for e-money issuers and electronic retail payment services to “utilize open systems capable of becoming interoperable with other payment systems in the country and internationally.”

Regulations mandating interoperability could force Safaricom to open its M-Pesa platform to e-money services from the country’s other telecoms, including Airtel Kenya’s Airtel Money service, meaning M-Pesa agents would be able to provide multiple money transfer services without restriction. Safaricom has in the past opposed calls from its competitors to open up its platform, arguing that doing so would slow its systems and stifle future innovation. In a short statement following the release of the CBK’s proposed regulations, the company said, “[A]ll stakeholders including ourselves are keen to support the CBK’s initiative to strengthen the e-payments policy environment.” The public has until Oct. 18 to comment on the proposed regulations.

Since launching in Kenya in 2007, M-Pesa has grown to dominate the country’s electronic money transfer arena, carving out a 68 percent market share and claiming more than 18 million subscribers by the end of 2012, according to the World Bank. This past June, Safaricom announced plans to overhaul the technology underpinning the M-Pesa platform, with the goal of improving transaction processing speeds to near real-time.

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